ForexLive Asia-Pacific FX news wrap: USD/JPY dropped under 149.00

• Nasdaq Futures Today: Key Price Levels
• CBA forecasts three more RBA rate cuts in 2025: May, August and November
• Reminder – Reserve Bank of Australia Deputy Governor Hauser is speaking tomorrow
• European Central Bank meeting this week – “Cheat sheet”
• CEO of Australia’s largest bank expects RBA rate cuts not coming until later in the year
• Canada confirms 25% retaliatory tariffs on US imports if Trump’s imposts go into effect
• ECB to cut by 25bp this week – focus is on signalling what’s to come
• J.P. Morgan sees Gold near US$3,000 by late 2025, maintains bullish outlook
• PBOC sets USD/ CNY central rate at 7.1739 (vs. estimate at 7.2727)
• China’s Commerce Ministry will take “necessary countermeasures” on Trump’s higher tariffs
• UK retail prices set to rise as costs increase
• Australia’s Retail Sales rebound in January, rising 0.3% m/m vs. 0.3% expected
• RBA rate cut in February – weight placed on downside risks to economy
• Japan Q4 Corporate Capex falls 0.2%, tepid domestic demand
• Goldman Sachs CEO Solomon says chance of a 2025 US recession is not zero
• More background on why Trump threatened Japan and China over currency deprecation
• Goldman Sachs vs. the Reserve Bank of Australia (OK, not really)
• The US has ‘paused’ all current military aid to Ukraine
• Japan finance minister Kato says Japan is not devaluing the yen
• Japan January Unemployment Rate 2.5% (vs. 2.4% expected)
• Trump’s threat to Japan (re the weak yen) was forewarned during Asia on Monday morning
• South Korea January industrial output and retail sales both decline
• Australian weekly consumer sentiment survey dropped to 87.7 (prior 89.8)
• Australian Q4 GDP growth data expected to remain soft, seen strengthening in 2025
• Things Trump is trashing faster than equities, #1: Atlanta Fed GDP tracker now at -2.8%
• Forexlive Americas FX news wrap: US data sags, tariffs loom and OPEC+ pumps more
• New Zealand January building permits +2.6% m/m (Prior -5.6%)
• Canada – Ontario Premier Ford says will completely halt export of nickel to the US
• Nasdaq erases all the gains since the election in bruising day
• China dampens fiscal stimulus hopes with article on deficits
• Trade ideas thread – Tuesday, 4 March, insightful charts, technical analysis, ideas

The
deadline for Trump’s 25% tariffs on neighbours Mexico and Canada is
barely an hour away, with no indication of any postponement this
time. They are due to impact from 12.01 am US Eastern time on
Tuesday, March 4, 2025.

Markets
in Asia spent the day digesting the Monday news of Trump confirming
that tariffs are on the way, and also that he was bumping up tariffs
on imports from China to 20%.

• China’s Commerce Ministry said it
  would be taking retaliation steps against Trump’s fresh imposition
  of higher US import tariffs.
• Canada’s
  Prime Minister issued a statement outlining Canada’s reciprocal
  tariffs against Trumps’ tariffs.

Also
in Trump’s Monday remarks were threats against China and Japan over
currency devaluation/depreciation. The
yen appreciated in Monday US trade on the comments, and that move
followed through today here in the timezone. Both Japan
finance minister Kato and
PM Ishiba disputed Trump’s accusations. Over many years Japan has
denied its ultra-loose monetary policy is aimed at weakening the
currency, and that its instead aimed at combatting deflation and low
inflation. The weak yen is just a side-effect. None of Japan’s G7
partners have publicly disputed Japan’s account. USD/JPY
dropped to lows just under 148.70 before bouncing back above 149.00.

Major
FX otherwise traded in small ranges only.

From
Australia we had minutes of the Reserve Bank of Australia’s
February meeting, where the Bank cut its cash rate for the first time
since November 2020. A key takeaway, for me, from the minutes was the
unsurprising talk that the Bank would be taking a slow and cautious
approach to rate cuts ahead, citing still present risks of inflation.
FWIW I think the global economy, and the RBA in turn, will be swamped
soon enough by the negative impacts of Trump’s imminent trade war
and rate cuts may come ahead of the RBA’s current reckoning. By the
way, Reserve Bank of Australia Deputy Governor Hauser is speaking
again tomorrow, Wednesday, March 5, 2025 at 8.45 am Sydney time (2145
GMT / 1645 US Eastern time). We’ll likely get more from him to hint
at the outlook.

This article was written by Eamonn Sheridan at www.forexlive.com.